COMPS DOWN, BUT CHILDREN’S PLACE SPEEDS GROWTH
Byline: David Moin
SECAUCUS, N.J. — The Children’s Place, which doubled its store count in the past two years, plans to double its size again by 2005, reaching 1,000 stores by then, and triple volume to at least $1.5 billion.
That aggressive forecast came from Ezra Dabah, chairman and chief executive officer of the children’s wear chain, during the firm’s annual meeting and spring 2002 fashion show Tuesday for stockholders, the press and Wall Street analysts. During the meeting, at the chain’s office and distribution center complex here, Dabah focused on the long-term prospects, but did not ignore the current difficult climate for retail. The day before, the company announced a 16 percent comp-store decline for the five-week period ended July 7, and said year-to-date comp sales decreased 7 percent. Based on current trends, the company anticipates a second-quarter loss of between 13 and 17 cents a share.
Dabah cited a slowdown in store traffic and blamed it on the difficult economy, but said the company is fighting back in the third quarter by increasing its level of fashion merchandise to improve sales and profit margins. Despite the sales shortfall, Dabah said inventory levels are below last year’s, that he doesn’t expect excessive markdowns in the second half, and that the 460-unit chain is on track to open 120 stores this year, for a total of 520 units. Sixty units were already opened this year. Stores average 4,200 square feet in size.
Texas and California are the principle areas of expansion, and the first stores in Puerto Rico, Canada and Mexico will open “very soon,” Dabah said.
Dabah call the expansion a “market-conquering strategy,” adding that “we look forward to the reality of operating 1,000 stores by 2005,” Later, he told WWD that he expects “a minimum” of $1.5 billion in volume in 2005. Last year’s sales came to $587 million.
The Children’s Place specializes in apparel and accessories under its own label for children, from newborn to age 12. The Children’s Place has found a niche, priced higher than Old Navy and lower than GapKids, and carrying coordinated merchandise generally with a higher fashion quotient. Department stores and Gymboree are also primary competitors.